Today Barack Obama was announced victor of the extensive and corrupted presidential race over his republican contester Mitt Romney. I am not relieved, sad or filled with joy at this result; in fact my response is indifference. Not because I am nihilist or because I don’t care about the elections, it’s because both candidates are representatives of Wall Street, and both candidates will or would have offered little progressive change to Capitol Hill that is necessary in order to create a more sustainable and developing society in the US. I was listening to a debate between students during lunch regarding Obama’s success during the presidency. The students in favor of Obama’s policy claimed that his presidency has bolstered social programs for the underprivileged and unemployed, when in fact Obama’s presidency and social programs favoring the poor are totally irrelevant; policies favoring the poor are even anti-theses of Obama’s presidency.
The only major bill which did favor the poor and underprivileged was the Affordable Health Care Act which was passed November 7th 2009. This act included an expansion of people eligible to Medicaid programs, increasing benefits to low income Americans for healthcare and prohibiting insurance companies from refusing coverage based on one’s medical history. This bill was more an act of emergency than of solidarity considering that 32 million people were uninsured, which is scandalous for a nation with one of the highest per capita incomes in the world. However claiming that the bill was merely an act of solidarity for the underprivileged is naïve; in fact the biggest earners from the bill were Wall Street having large investments in HMOs and insurance companies. This is because it brought 32 million people in to the market, increasing profits. If the Affordable Health Care Act was a true legislation of solidarity, then the health care system would be nationalized in order to eliminate health care inequality and increase the quality of healthcare for the poor and low income earners. Public health care could be implemented and financed through military spending cuts by 50% (US would still have the largest military expenditure by 300 billion dollars) and increasing taxes for the rich and incorporating the Tobin Tax for Wall Street fat cats. This would be a truly progressive healthcare system where the rich as well as the poor have access to the same level of healthcare and where quality is favored over profits. Instead Obama is opting for the Wall Street version.
Although the Affordable Health Care Act may seem as an act of solidarity and pragmatism as well as progressivism, the rest of his domestic policy has lacked the same success. His attempt to revive the US from recession through the Stimulus package was successful in retaining economic growth however it did not provide the general restructuring that the economy needed in order to return to the growth before 2008 and reduce unemployment. Through this bill he cut 120 billion dollars’ worth of taxes including income tax credit for middle income earners and low income earners, as well as investments in infrastructure and renewable energy. As much as I believe in relieving tax burden on the poor, the reason why economic recovery has been so slow is because of the household debt which is worth 13 trillion dollars in the US, which is only 2 trillion dollars short of the total economic output. This has serious effects on consumption and is the reason why companies are hoarding 1.3 trillion dollars’ worth of liquid assets, the money is there but businesses are not willing to invest due to the lack of demand from private debt. Only by restructuring debt through buying mortgage loans and eliminating interest rates can consumer confidence increase. Not through measures like Quantative Easing which is only injecting money into Wall Street to serve investors. And especially not through cutting taxes which will only go into savings even though interest rates are at a record low.
Obama’s presidency has done what Wall Street wanted. Preferably the bankers would have liked further extensions to the Bush era tax cuts in order to increase their private wealth; however he has spent billions of dollars on ineffective tax cuts further increasing public debt so that Wall Street can feed off of government bonds, while the federal reserve is buying “toxic” assets from the bankers in order to alleviate and increase their billion dollar profits from mutual funds, hedge funds, increased savings and the bond market. He has however served some of the poor through funding their health insurance, but then again, this has also increased the wealth of Wall Street investors and venture capitalists that get increased returns from their CIGNA investments. All in all the Obama’s first mandate was essentially a mandate serving Wall Street fat cats while doing little to alleviate the increasing private debt of the middle and lower classes. While approaching the “fiscal cliff” in which Bush era tax cuts will be suspended and payroll taxes will rise, as well as huge cuts in public spending, congress and the white house will obviously need to address this issue but not through excessive austerity. The cliff needs to be tackled by progressive tax reform. Considering Obama’s promises of further tax cuts for the middle class and spending cuts, the future looks grim for the US. In any case, I am not looking forward to it.
I was looking for blogs on wordpress for the sake of interest and maybe even debate, I found a blog called You Viewed/Editorial. It had a post with a video called “Voices Without A vote”. I was writing a response to the video until I realized that the response was very long and I might as well post it on my blog. This is the link to the blog and the post: http://youviewedblog.wordpress.com/2012/10/12/if-not-you-who-if-not-now-when/
And this is my response:
Don’t you guys see the populism in this video and the two candidates? The United State’s political system is rigged and corrupted by lobbyism, the candidates are bought, and the two party system is elitist. The Democratic Party used to be a worker’s party, now its a conservative party favoring populist tax cuts and injecting billions of dollars into wall street through QE instead of mainstreet. Making wall street rich and the 99% left behind.
Romeny is not truly in favor of debt reduction, Obama isn’t either, but since this video is praising the GOP and ultra christian conservatives I will focus on him. He proposes a 20% income tax cut, let me remind you that only about half the country pays a substantial amount of income tax, yet almost all americans (except for the 1%) pay payroll tax. If one should cut taxes, (which they shouldn’t in the United States or they’ll face an increase in debt, bond yields and debt servicing leading to crisis) it should be payroll tax. The only way in which Romney will pay for these cuts is closing loop holes which according to the CBO will not make up for it.
I also want to say that the reason you have so much debt in America is not because of Obama, he followed textbook keynesian economics in order to stimulate the economy through investments in infrastructure and clean energy, QE(1) and other components of the stimulus package. But the debt was already in place due to Bush era tax cuts and the two wars. During the Clinton era taxes on the wealthiest were increased and growth was higher than during George Bush jr, in addition he was able to balance the budget, not that I am a supporter of Clinton or the democratic party for that matter. But Obama came into office with a huge budget deficit and economic collapse, don’t blame Obama for 2008-2012, blame Bush and the GOP.
And when they talked about returning to Reagan’s policies I started laughing, because he is anti-democracy and not pro-free trade or pro-small government. In both of his election campaigns he claimed that he would reduce the federal deficit, but in reality the deficit increased through his investments in the Space Program and funding the Muhajadeen which would eventually kill thousands of Americans on 11th September 2001. Reagan is the biggest paradox, in addition he supported the military junta and dictatorship in Haiti and aided rebels against the DEMOCRATICALLY elected government in Nicaragua.
If you want the budget to be balanced you shouldn’t vote for Romney or Obama but for the Constitutional Party’s candidate Virgil Goode, not that I am a supporter of his ideas either. What you guys don’t realize is that American politics is bought by wall street, as long as corporations can still make donations to campaigns, the poltics in the USA will not represent the people of America, but the corporations of America.
So I watched this video on www.therealnews.com which is a independent news network based on private donations not corporate sponsorship. The video included many left wing and progressive intellectuals discussing job growth and job creation. There are many aspects of the video which I agree with, for example that growing inequalities within the economy leads to economic ineffieciencies and eventual collapse due to the fact that accumulation capital and investment does not reflect the demand of 99% of the population. Also the obvious fact that tax cuts for the rich does not increase investments or consumption, as there is only so much one can consume with million dollar incomes and therefore this money will end up in Swiss bank accounts, is also correct.
However, I did disagree with one point, the fact that the US government should continue investing in public services and stimulus programs in a time when the deficit is equal to 1 trillion dollars and when the economy is at risk from the fiscal cliff scheduled for January next year. The fact is that the US government is larger than it can afford to be, they have already lead a deficit spending plan and still are. I believe in keynesian theory of economics in the sense that government should be running a deficit in economic downturns and a more balanced or even a surplus budget during normal economic performance. However considering that the US government were already in deep deficit prior to 2008 due to the two wars and the Bush Administration’s tax cuts there was little room for stimulus, and the level of deficit accumulated today should definitely be the maximum incase of a huge increase in bond yields and increase costs for debt servicing which would lead to a debt crisis similar to that of the EU.
What needs to be done in the US is not making a 20% tax cut like Mitt Romney proposes, not even a middle class income tax cut like Barrack Obama proposes, but a tax increase on the richest 10% of americans and increased cuts in military. In fact both parties, republicans and democrats, propose to increase military spending and decrease taxes while cutting medicare funds for the old and vulnerable. It is almost embarrasing that the democrats and Obama consider themselves to be progressives when they are actually hardline conservatives; their policy proposals don’t even represent liberalism.
Apart from the Green Party’s candidate Gill Stein, who has no chance of winning due to the corrupted political and electoral system based on money, Obama is probably the better choice as the Mitt Romney campaign expresses policies extremely similar to that of George Bush; cutting taxes on the rich, increasing oil drilling, and having plans to invade Iran if necessarry. America does need a more democratic political system in which the entire political spectrum is represented, not only conservatives, that way we can truly fight the problems of the US and achieve humane deficit reduction plans.